- U.S. private equity secondaries are surging in 2025 toward ~$200B, with GP-led continuation deals taking an increasingly large share.
- Weak IPO/M&A exits are keeping primary liquidity tight, pushing managers and LPs toward secondary sales and structured alternatives.
- Fundraising is down sharply, with U.S. PE dry powder falling from ~$1.3T (Dec 2024) to ~$880B (Sep 2025) and commingled commitments ~40% lower year over year.
- To compete, GPs are emphasizing operational value creation, innovative deal structures, and specialization in areas like digital infrastructure/AI, industrials, and insurance.
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Though the primary article could not be retrieved, broader market data paints a vivid picture: the private equity (PE) landscape in the United States is transitioning from its previous exit-constrained phase into one dominated by secondary-market activity and alternative liquidity structures. Key facts and trends from recent authoritative sources reveal both the scale of this shift and the strategic adjustments industry players are making.
First, secondary activity has surged. According to forecasts, the volume of private equity secondaries will approach roughly $200 billion in 2025, up significantly year-over-year. Within this, GP-led deals account for an outsized share—around 45% of transaction value, up from just 18% a decade prior. These GP-led continuation vehicles allow GPs to retain upside in strong portfolio companies while offering liquidity to LPs in a weak IPO/M&A exit environment.
Simultaneously, traditional fundraising is under pressure. U.S. funds are seeing materially less capital raised in 2025 vs 2024. Commitments to traditional commingled funds are down approx. 40% year over year, and dry powder has fallen from $1.3 trillion at end-2024 to about $880 billion by September 2025. With fewer successful exits, LPs are more selective, pushing fund managers to sharpen operational execution and sector-specific expertise.
Deal activity is recovering in value terms even as transaction volume remains subdued. Dealmakers are using creative deal structures—such as carve-outs, take-privates, and hybrid capital investments—to deploy capital. At the same time, sectors like infrastructure (especially data infrastructure tied to AI), industrials, and insurance are becoming focal points of investment.
Risk perceptions have shifted accordingly. Private credit is under scrutiny amid a rise in defaults and compression in spreads, but certain segments—asset-based finance, commercial real estate debt—are viewed as offering better risk-return profiles. Meanwhile, institutional investors are increasingly demanding transparency, improved reporting, and value creation metrics, rather than leveraged returns alone.
Strategic implications for fund managers and investors:
- Managers able to deploy strong GP-led secondary or continuation strategies are at a premium.
- Operational excellence, especially via tech-enabled monitoring and sector specialization, has become a competitive differentiator.
- LPs face pressure to balance the desire for liquidity with long holding periods; vehicles offering faster returns (secondaries, infrastructure, credit) may see more capital inflows.
- Exit timing and structuring, including considering sponsor-to-sponsor sales or selective IPOs, will be critical levers through 2026.
Open questions remain:
- How deep will valuation compression go in ageing assets, and will markdowns reveal unexpected credit risk in legacy PE holdings?
- Will regulatory shifts (e.g. in defined contribution access, fiduciary duty) meaningfully broaden retail participation in PE, or raise compliance burdens that hamper returns?
- To what extent will macro variables—interest rate policy, inflation, geopolitical risk—disrupt current momentum?
Supporting Notes
- In 2025, private equity secondaries transaction volume is projected to reach ~$200 billion, with GP-led deals making up ~45% of that volume.
- Dry powder held by U.S.-based PE funds declined from ~$1.3 trillion in December 2024 to about $880 billion in September 2025.
- Commitments to traditional commingled PE funds in the U.S. are down ~40% year on year.
- Exit value is slowly rebounding: PE-backed IPO proceeds in Q3 2025 were up ~68% year over year, though exit activity remains uneven.
- Sectors such as infrastructure (digital infrastructure in particular), industrials, and insurance are among the preferred investment targets.
- Private credit faces a mixed outlook with growing concerns over defaults, particularly in direct lending, though more structured credit and asset-backed approaches are viewed more favorably.
- Dealmaking momentum in U.S. PE is building in late-2025 and into 2026, aided by interest rate stability, narrowing valuation gaps, and investor demand for liquidity.